Purchasing a gift card? Read this first!

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News Eagle - Hawley, PA

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Posted Dec. 13, 2012 at 5:40 PM

Posted Dec. 13, 2012 at 5:40 PM

Hawley, Pa.

By Edward Johnson

President & CEO, Better Business Bureau

When it comes to buying presents, all of us have one thing in common: It is difficult to buy presents for some people. No matter if it’s a holiday, birthday or special occasion, purchasing a meaningful gift can prove to be a real conundrum. For this reason gift cards take the guess work out of gift giving. Not only that, they provide a huge convenience factor to the time-crunched, stressed-filled life most of us lead.

This holiday season the National Retail Federation estimates that 81% of shoppers will purchase at least one gift card. However, according to Consumer Reports, 25% of people failed to use the card within a year after receiving it. While gift cards are easy on the giver, they can prove challenging to the receiver. Why? We lose them, misplace them, or simply forget about them. In addition, sometimes the gift cards end up being a hassle to use.

Some gift cards have hidden fees and strings attached. Before buying and giving a gift card to that "hard to shop for" friend or family member, the Better Business Bureau (BBB) advises consumers to read the fine print and know the terms. You should also know that there have been recent changes in federal laws to improve a consumer’s chance of getting full value out of the cards they buy and give. These rules generally apply to gift certificates, store gift cards and general use prepaid cards, which are often branded by payment networks such as Visa or MasterCard.

Here are some helpful tips from the BBB regarding gift card purchases:

Buy from sources you know and trust. Avoid buying gift cards from online auction sites because the cards may be counterfeit or may have been obtained fraudulently.

Read the fine print before you buy. Is there a fee to buy the card? If you buy a card by phone or online, are there shipping and handling fees? Is there an expiration or "use by" date? If you don’t like the terms and conditions, buy elsewhere.

See whether any fees will be deducted from the card after you purchase it.

Some cards will deduct a fee from the card, rendering the card less than its face value.

Inspect the card before you buy it. Verify that none of the protective stickers have been removed. Make sure that the codes on the back of the card haven’t been scratched off to reveal a PIN number. Report any damaged cards to the store selling the cards.

Give the recipient your original receipt so they can verify the card’s purchase in case it is lost, stolen or has been compromised.

Page 2 of 2 - Consider the financial condition and time in business of the retailer or restaurant. If they are struggling or brand new, a gift card to a company that may be going out of business or has no track record can be a risky gift.